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How to Get an Equipment Loan in 2019

Buying equipment comes at a price – a price small businesses may not be able to afford upfront. Whether you need to replace outdated equipment or purchase new ones, you might want to apply for an equipment loan.

An equipment loan provides businesses the funding they need to purchase or upgrade equipment. Instead of securing the loan with personal or business assets, the equipment you’re going to purchase is used as collateral. If you fail to pay back the loan, lenders will repossess your equipment.

How to Get an Equipment Loan

You can obtain an equipment loan from banks or alternative lending sources, such as SMB Compass. It’s very important to choose the right lender for your equipment loan. The best type of lender will guide you through the entire loan process.

Keep in mind that terms and rates vary among different lenders. Before you choose a lending company, make sure to find out the requirements for equipment loan. While high credit scores are not a requirement, lenders may still require a minimum credit rating level or other criteria when applying for an equipment loan.

Once you’re ready to seal the deal, make sure to read and understand the fine print. Here are top three things you should ask about before signing the paperwork:
  • Collateral: Make sure that you clearly understand the terms of the loan. Check whether you’re securing the loan with other forms of collateral (personal assets/business assets) other than the equipment itself.
  • Default: It’s understandable that when you don’t pay back the loan, your equipment will be repossessed. Keep in mind that if the asset’s value has depreciated from the time you bought it, you may owe the lender the difference between the current equipment value and your outstanding loan.
  • Trade-Ins: There are loans that allow you to trade in older equipment to get an upgrade. Make sure you ask about the shortest period before you’re able to trade equipment. Other factoring companies will charge you for trading too early.

How to Apply for Equipment Financing

To make sure that our loan applications are fast and easy, we’ve simplified it in three steps:

  1. Prequalify: You can talk to an SMB Lending Expert in order to prequalify for equipment financing. They may ask you to fill out an online form, which can be completed within minutes.
  2. Approved: Once you’ve submitted all the necessary information, we will review the rates and terms, and any questions you may have about your loan.
  3. Closed: After accepting your approval and providing closing documents, your loan will be closed and funded in less than 24 hours.

Applying for an equipment loan at SMB Compass is as easy as 1,2,3. If you’re interested in applying for an equipment loan, don’t hesitate to contact usby phone at (646) 569-9496 or email us at [email protected].
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